What does the Indemnity insurance cover

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What does the Indemnity insurance cover

What does the Indemnity insurance cover?

Indemnity insurance is used during transfer transactions to cover a legal error with the property that cannot be resolved quickly or cannot be resolved at all.

Compensation can be taken as an option to correct the error. Especially if you are happy with the property you are buying and just want to ensure that your mortgage is released.

Defects may include the following:

  • Planning permit / building regulations
  • Restrictive agreements
  • Absence of usability
  • Pulpit repair
  • Insolvency law

Planning permits and building regulations

These are the most common errors covered by the statutory indemnity insurance.

If the property you are purchasing has been built, altered or extended without complying with building regulations or planning, the local authority may take action to request redevelopment or repair.

There is a limit of four years. So if the work is older, the risk of action is small.

In such cases, reimbursement insurance is more suitable than the seller trying to comply with the plan terms for a conversion or roof extension with retroactive effect.

Indemnity insurance is not a guarantee of the quality of the work. Evaluate engineering research and reports to see if it is safe.

Restrictive agreements


Restrictive pacts are provisions in a deed to a property that restrict use in one way or another – for example, not to build abusers.

There may be conditions for the insurance, for example that there is no current dispute or that the offense has been committed for a certain period.

Absence of usability


Here you get access to property through land, where there is no right of access in this way.

The compensation insurance covers the costs of setting up the service or loss of value if access becomes a problem.

Insolvency law


Sometimes, if a special deposit is required, the carrier asks for compensation.

Non-life insurance cancellation

All compensation policies contain a clause stating that the insurance will be invalid if the existence of the problem is disclosed to third parties.

In practice, it often makes it impossible to correct the reason why the insurance is closed without making it invalid.

For example, if you were to build indemnity insurance for an extension without a building permit and then obtain a retroactive building permit, you would invalidate the insurance. Although a building permit was denied.

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